.Ray Dalio, Bridgewater Associates co-chairman and co-chief investment police officer, speaks during the Skybridge Financing SALT New York 2021 conference.Brendan McDermid|ReutersAs the U.S. Federal Reserve applied its own initial rates of interest reduced given that the very early Covid pandemic, billionaire capitalist Ray Dalio warned that the U.S. economic condition still faces an "massive volume of financial obligation." The reserve bank's decision to cut the federal funds rate through 50 manner points to a series of 4.75% to 5%. The rate not only establishes temporary loaning costs for banking companies, but additionally effects a variety of buyer products like mortgages, car finances as well as credit cards." The challenge of the Federal Book is actually to keep interest rates higher good enough that they benefit the collector, while keeping them not therefore high that they are actually problematic for the borrower," the founder of Bridgewater Associates informed CNBC's "Squawk Box Asia" on Thursday, keeping in mind the difficulty of this "harmonizing process." The united state Treasury Division just recently disclosed that the federal government has actually invested more than $1 mountain this year on enthusiasm payments for its $35.3 mountain public debt. This rise in the red company expenses additionally coincided with a substantial increase in the USA deficit spending in August, which is actually approaching $2 trillion for the year.On Wednesday, Dalio provided financial debt, cash and the financial cycle as one of the top five forces determining the global economy. Increasing on his point Thursday, he stated he was actually commonly considering "the enormous quantity of financial obligation that is being produced by authorities and also profited from by central banks. Those magnitudes have certainly never existed in my life-time." Federal governments around the world took on record financial obligation worries during the pandemic to fund stimulus deals and also other economical steps to stop a collapse.When asked them about his expectation and whether he observes a nearing credit score event, Dalio answered he performed certainly not." I find a big loss of value in the worth of that financial debt with a blend of artificial reduced genuine costs, so you won't be actually recompensed," he said.While the economic condition "resides in family member equilibrium," Dalio noted there is actually an "substantial" amount of personal debt that needs to be rolled over and additionally offered, new debt produced by the federal government." Dalio's worry is that neither past President Donald Trump or Bad Habit President Kamala Harris are going to focus on financial debt durability, implying these pressures are extremely unlikely to relieve despite who wins the upcoming presidential political election." I assume as opportunity goes on, the course will definitely be more and more towards monetizing that financial debt, adhering to a road very similar to Japan," Dalio posited, suggesting just how the Oriental nation has always kept rate of interest artificially low, which had depreciated the Oriental yen and reduced the value of Japanese connects." The market value of an Eastern connect has decreased through 90% to ensure that there's an enormous income tax with unnaturally offering you a lower turnout each year," he said.For years, Asia's reserve bank stayed with its own bad fees program as it plunged into one of the absolute most hostile monetary easing workouts on earth. The country's reserve bank just just recently lifted rates of interest in March this year.Additionally, when markets carry out certainly not possess adequate purchasers to take on the source of financial debt, there could be a situation where rates of interest need to go up or the Fed might need to intervene and get, which Dalio reckons they will." I will watch [the] assistance of the Fed as a quite notable negative event," the billionaire pointed out. Personal debt surplus likewise raises questions of exactly how it makes money." If our company remained in tough cash conditions, after that you would possess a credit event. But in fiat monetary terms, you possess the acquisitions of that debt by the central banks, generating income from the financial obligation," he said.In that case, Dalio expects that the market places would likewise observe all unit of currencies drop as they are actually all family member." So I think you will see an environment very identical to the 1970's atmosphere, or the 1930 to '45 type of period," he said.For his very own portfolio, Dalio insists that he performs not like financial obligation assets: "so if I'm going to take a tilt, it will be undersized in debt properties like connections," he said.u00c2.